Carbon credit insurance is a risk-transfer solution designed to protect participants in the carbon market — buyers, sellers, lenders, and project developers — from various financial and operational risks related to carbon credits.

Key aspects include:

• Non-delivery or underperformance: coverage for the risk that a project fails to deliver the agreed volume of carbon credits or offsets.

• Invalidation and project reversal: protection if credits become invalid due to fraud, regulatory issues, or project failure (e.g., wildfire destroying forests), or if carbon is re-released into the atmosphere.

• Political and legal risks: safeguards against losses caused by government or regulatory changes, such as bans, withdrawal of authorizations, or ownership disputes.

• CORSIA compliance risk ensures coverage for obligations under the ICAO CORSIA scheme, mitigating exposure if airlines or related entities fail to meet mandatory offset requirements starting 2027.

Professional risk assessment, clear terms, and thorough due diligence enable companies to operate confidently in the evolving carbon emissions market. Carbon credit insurance helps maintain the credibility of climate commitments while protecting business financial interests.